June 25, 2017

US issues arrest warrants for former VW execs over emissions cheating

© Frank May / Global Look PressVolkswagen to pay $2.8 bn fine in diesel emissions scandal

According to the Suddeutsche Zeitung newspaper, the five are accused of conspiring to commit fraud and violating US environmental regulations. At least two were reportedly confidants of former VW CEO Martin Winterkorn.

The German daily suggested Berlin will not hand over the accused to the American authorities. It said that if found guilty the suspects would face extremely long jail sentences compared to German sentencing standards. They, however, will be unable to leave Germany due to the risk of being extradited to the United States from a third country.

Former Volkswagen manager Oliver Schmidt was arrested earlier this year in Miami as he was about to fly to Germany. He was charged with conspiracy and other crimes in the company’s scheme to sell around 600,000 vehicles that failed to comply with US pollution standards. Schmidt faces up to 25 years in prison.

In 2015, the world’s largest automaker Volkswagen admitted to US regulators it had cheated on emissions tests using software installed in as many as 11 million diesel vehicles sold worldwide. The scandal forced VW CEO Martin Winterkorn to resign.

The company has settled with the US authorities agreeing to pay a $2.8 billion criminal penalty.

Volkswagen also agreed to pay $1.5 billion in a civil lawsuit brought by the US government, and spend $11 billion to buy back cars and offer other compensation.

Under the terms of the settlement negotiated in January, VW also agreed to the appointment of an independent monitor to observe the company’s compliance and control measures for three years.

Article source: https://www.rt.com/business/393736-us-arrest-warrants-volkswagen/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi reshuffle could completely shake up oil markets

Saudi Crown Prince Mohammed bin Salman © Bandar AlgaloudSaudi King names young son Mohammed bin Salman crown prince, strips eldest of title post

The heir apparent has already been effectively running the country for the past few years, so the move was not entirely a shock. Nevertheless, the effects on the oil market could be profound.

The new crown prince is known to be a bit unpredictable. In the early phase of the oil price meltdown, he said that prices did not matter. But the plunge below $30 per barrel in early 2016 seemed to have changed the calculus. Last year Saudi Arabia became the principle driver behind a return to “market management,” that is restraining output to stabilize prices.

With the OPEC production cuts – which have had to be extended from six to 15 months – still proving to be insufficient at balancing the market, it is not entirely impossible that the crown prince might reverse course yet again at some point and return to a “market share” strategy. Or he could decide to deepen the cuts, an idea floated a few days ago by the Iranian oil minister. For now though, higher prices are surely to be the goal, particularly with the IPO of Saudi Aramco not far off. Either way, after Mohammed bin Salman and King Salman ousted former oil minister Ali al-Naimi last year, they have tighter control over the kingdom’s oil policy.

The IPO is another signature initiative of the young prince. He hopes to sell off 5 percent of Aramco, which he argues could raise around $100 billion (some analysts dispute that figure) in order to finance his Vision 2030, which calls for a diversification of the Saudi economy. The elevation of Mohammed bin Salman is being interpreted in some corners as an effort to accelerate this economic transformation. With low oil prices, a sizable budget deficit, large but dwindling cash reserves, and a restive and young population, time is of the essence.

Meanwhile, the crown prince is also known to be aggressive and bellicose when it comes to Saudi Arabia’s position in the Middle East. As such, his promotion brings ominous possibilities in regards to the simmering conflict between Saudi Arabia and several of its regional rivals. Bin Salman is behind Saudi Arabia’s disastrous and bloody conflict in Yemen, which has been very costly and brought no discernable strategic benefit to the kingdom.

He is also known to be extremely hawkish towards Iran. This is an issue that would certainly push up oil prices if it got out of hand. “[It] is not really a question of if but rather of when a new escalation with Iran starts,” Olivier Jakob, managing director of consultant Petromatrix GmbH, told Bloomberg.

“Under his watch, Saudi Arabia has developed aggressive foreign policies and he has not been shy about making strong statements against Iran.” Iranian state news called the elevation of Mohammed bin Salman a “soft coup.”

There is no way to predict how a confrontation between the two countries would play out, but any prospect of oil supply disruption would ripple through the oil market even as it currently remains oversupplied.

Most recently, according to the WSJ, Mohammed bin Salman has pushed for the sudden blockade of Qatar. The former Crown Prince Mohammed bin Nayef wanted to resolve the dispute through diplomacy, and the different stances between the two are said to have been the catalyst for latter’s ouster. The country needed unity and stability behind one policy, analysts say, which, in this case, was a more hardline approach to Qatar. Bin Salman won the argument, and was elevated to become crown prince.

The royal succession reshuffling is viewed as “a much more assertive, insistent domineering”approach to its neighbors, Chas Freeman, former U.S. ambassador to Saudi Arabia under President George H.W. Bush, told the WSJ. “Some of the neighbors regard it as a drive for Saudi hegemony in the region,” he said.

But absent a more overt conflict involving some sort of military engagement, the repercussions of the new line of succession will hinge much more on the country’s oil policy. On that front, most analyst expect Saudi Arabia to stick to, or even deepen, the OPEC production cuts, despite the sacrifice it would entail.

The IPO of Aramco is too important to the country, an offering that really needs higher oil prices. So, at least for the short-term, it is probably business-as-usual in Riyadh.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/393711-saudi-reshuffle-oil-markets/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Czech Republic sends mixed signals on euro adoption

The Little Mermaid in Copenhagen, Denmark © NielsDK / Global Look PressDenmark other EU members may soon be forced into the euro

According to Rusnok, one of the reasons the country is committed to joining the euro is that the Czech crown is now floating and not pegged. The Czech central bank scrapped its cap on the crown in April, allowing it to float freely to stronger levels against the euro for the first time since 2013.

Last week Rusnok said he thought Czechs would not be adopting the euro for five to ten years. He added that while wage rises in some of the leading European economies are almost zero, the average salary increase in the Czech Republic is currently around five percent so that the trend was positive.

Czech President Milos Zeman said on Friday the country has been ready to join the eurozone for almost ten years but that the public was irrationally afraid to do that.

“We have been fulfilling the Maastricht criteria, but there is a mental barrier to its adoption. A mere 30 percent of Czechs are in favor of entering the eurozone,” he said.

People enter a government-run job centre in Madrid, Spain. © Andrea ComasEurozone labor market in much worse shape than official data indicates – ECB

Statistics showed the nominal rate of wage rises in the Czech Republic was 5.3 percent in the first quarter of the year. Currently, average Czech wages are around €10 an hour. Across the EU the figure is around €25 while in some eurozone countries it’s around €30.

According to an unnamed economist cited by Radio Praha, even if there were a real five percentage point difference in the wage rises, it would take 15 years at that rate for average Czech wages to catch up with those of neighboring Germany.

“For us to remain at the core of the European Union, sooner or later we will have to respond to the question of not whether, but when the Czech Republic is capable of adopting the single European currency, ʺ said Czech Prime Minister Bohuslav Sobotka.

The Czech officials’ announcements follow recent media reports the European Commission wants all 27 members of the bloc to adopt the euro by 2025.

Officials from the EU are reportedly seeking to draw up a euro budget able to incorporate a fixed tax payment from all the member states. The raised cash would be invested across the bloc.

The euro is the sole currency for 19 members of the bloc. The nine remaining countries, including Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom, that is currently in the process of quitting the EU, do not use the euro as the main national currency.

Article source: https://www.rt.com/business/393703-czech-republic-euro-adoption/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

‘70% of Czechs reject euro’: Prague still hesitant over single currency

The Little Mermaid in Copenhagen, Denmark © NielsDK / Global Look PressDenmark other EU members may soon be forced into the euro

According to Rusnok, one of the reasons the country is committed to joining the euro is that the Czech crown is now floating and not pegged. The Czech central bank scrapped its cap on the crown in April, allowing it to float freely to stronger levels against the euro for the first time since 2013.

Last week Rusnok said he thought Czechs would not be adopting the euro for five to ten years. He added that while wage rises in some of the leading European economies are almost zero, the average salary increase in the Czech Republic is currently around five percent so that the trend was positive.

Czech President Milos Zeman said on Friday the country has been ready to join the eurozone for almost ten years but that the public was irrationally afraid to do that.

“We have been fulfilling the Maastricht criteria, but there is a mental barrier to its adoption. A mere 30 percent of Czechs are in favor of entering the eurozone,” he said.

People enter a government-run job centre in Madrid, Spain. © Andrea ComasEurozone labor market in much worse shape than official data indicates – ECB

Statistics showed the nominal rate of wage rises in the Czech Republic was 5.3 percent in the first quarter of the year. Currently, average Czech wages are around €10 an hour. Across the EU the figure is around €25 while in some eurozone countries it’s around €30.

According to an unnamed economist cited by Radio Praha, even if there were a real five percentage point difference in the wage rises, it would take 15 years at that rate for average Czech wages to catch up with those of neighboring Germany.

“For us to remain at the core of the European Union, sooner or later we will have to respond to the question of not whether, but when the Czech Republic is capable of adopting the single European currency, ʺ said Czech Prime Minister Bohuslav Sobotka.

The Czech officials’ announcements follow recent media reports the European Commission wants all 27 members of the bloc to adopt the euro by 2025.

Officials from the EU are reportedly seeking to draw up a euro budget able to incorporate a fixed tax payment from all the member states. The raised cash would be invested across the bloc.

The euro is the sole currency for 19 members of the bloc. The nine remaining countries, including Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom, that is currently in the process of quitting the EU, do not use the euro as the main national currency.

Article source: https://www.rt.com/business/393703-czech-republic-euro-adoption/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

American Airlines rejects bid from Qatar Airways to buy stake

FILE PHOTO © Caren FirouzIran supplies 1,000+ tons of food to Qatar every day – media

“It makes no sense,” Doug Parker told CNBC.

“I found it confusing. I was a little bewildered. Why an airline we are aggressively fighting would want to take a stake makes no sense,” added the company head.

Since 2015, American, Delta, and United have complained about unfair competition from three Middle East-based competitors — Emirates, Etihad, and Qatar Airways. The American airlines are against the expansion of their Arab rivals into the US, blaming them for keeping prices artificially low because their governments are subsidizing them.

According to Parker, the offer from Qatar Airways probably meant the attitude toward the carrier would change if it owned something American.

“If that is their motivation, it is misguided and ill-conceived. All this is doing is strengthening our resolve to defend our airline, which we will continue doing vigorously,” he told CNBC.

Parker also said he found Qatar Airways’ proposed investment “puzzling given our extremely public stance on the illegal subsidies that Qatar, Emirates, and Etihad have all received over the years from their governments.”

© Alkis KonstantinidisQatar Airways appeals to UN over Gulf blockade

Qatar Airways is yet to make a formal offer. Any purchase above 4.75 percent requires approval from American’s board.

Qatar Airways responded on Twitter, saying: “We are glad to see American Airlines’ CEO Doug Parker’s perspective that he agrees with Qatar Airways’ belief that American Airlines is a solid financial investment.”

Qatar Airways has been under increasing pressure as a coalition of Muslim countries led by Saudi Arabia has blockaded Qatar in a diplomatic rift.

The airline is forbidden from flights to neighboring Saudi Arabia, Bahrain, United Arab Emirates and Egypt. Flights to and from Qatar have been limited to a narrow corridor via Iran.

The ban is expected to cause a significant decline in revenue for the airline.

Article source: https://www.rt.com/business/393702-american-airlines-qatar-airways/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Boeing outsells Airbus at Paris show

© Matt Mills McKnightIran signs final contract to buy 30 Boeing 737 planes

According to the head of sales John Leahy, the planes ordered are valued at just under $40 billion.

Airbus signed deals with AirAsia, and privately-owned Iranian carriers Zagros Airlines and Iran Airtour.

“Is this a slower show than previous years? Yes, it is. Are we conceding that Boeing sold a few more airplanes than we did? Yes,” Leahy told a news conference.

Boeing’s head of commercial aircraft sales Ihssane Mounir said the company won orders and commitments for 571 planes worth as much as $74.8 billion.

“It’s been very exciting for us,” Mounir said as cited by Bloomberg. “I’ve been to many of these, and this is probably one of our busiest” shows.

Pledges to buy the new single-aisle 737 Max 10, which Boeing began marketing in Paris to rival Airbus’s A321neo, amounted to 361 airliners, he said.

“We had expected they would have had a bigger launch on the 737 Max 10, not quite as many conversions, more incremental orders,” Airbus’ Leahy said, adding Boeing’s plane launch could result in price pressure. “They’re clearly going to come after us on price.”

The biggest disclosed buyer at the Paris Expo, GE Capital Aviation Services, ordered 100 Airbus planes valued at $10.8 billion and converted 20 Boeing production slots from previous purchases to the Max 10.

Boeing announced it had signed a sales agreement with an “unidentified major airline” for 125 737 Max 8s valued at $14 billion.

The world’s third-largest lessor Avolon ordered $8.4 billion worth of Boeing models. Its CEO Domhnal Slattery told Bloomberg the unit of Beijing-based Bohai Capital Holding decided to lock in deliveries of as many as 125 of the upgraded narrow-body jets starting in 2021 because the slots are “very valuable real estate.”

He said the Max series is oversold through 2020, and capacity is finite for the model favored by budget carriers. Slattery forecast the aerospace market is shifting to Asia due to the middle-class expanding by more than 1 billion people over the next decade.

Article source: https://www.rt.com/business/393578-airbus-boeing-orders-defeat/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bitcoin rival ethereum can make Russia global hub for blockchain technology

World leadership could be achieved with the assistance of ethereum, a decentralized computing platform, and its limitless applications, according to Buterin.

Ethereum has become such a popular cryptocurrency it is now the world’s second-largest after bitcoin, with a capitalization of $32 billion.

According to the founder, blockchain is not just about cryptocurrencies, but the technology has wider applications. While cryptocurrencies have earned a questionable reputation, the blockchain ledger behind them has tremendous potential to simplify transactions in a variety of industries.

Buterin, who met President Putin on the sidelines of the St Petersburg International Economic Forum in June, told RT that ethereum has huge expansion plans for Russia.

The company’s representative in Russia Martynov added that “in five years Russia could become a global center for blockchain expertise. The country plans to attract and teach programmers blockchain technology and then offer the world expertise.”

Ethereum intends to expand in Russia, he added.

© Stephen LamAlternative cryptocurrency ‘ethereum’ looks to topple bitcoin

“For example, ministries use a centralized IT system which is very expensive to maintain. The blockchain is decentralized and lets the government save money,” said Martynov.

“Second, there is little human factor in blockchain technology. The level of red tape and corruption will fall, because with people there’s always a risk for that.”

Buterin added that “such technology allows you to send money from South Korea to Kyrgyzstan, Crimea or Guatemala as if there were next door to you.”

When asked whether blockchain can hurt the global financial sector, Buterin pointed out that “people have switched from using gold to paper as money. Then they started using another kind of paper as money. Even if blockchain transforms the shape of the global economy, humanity will certainly live through it.”

The Russian-born inventor stressed that any new technology could be misused. However the positive will outweigh the negative in its long-term applications.

Buterin’s cryptocurrency ethereum has more than $32 billion in market capitalization.

Over the last twelve months, one ethereum has grown from $10 to about $350, a 3,500 percent surge in value.

Born in Kolomna in the Moscow region, Buterin emigrated with his parents to Canada, relocating to Singapore this year.

Article source: https://www.rt.com/business/393741-ethereum-russia-blockchain-buterin/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Most refugees to stay jobless for years – German minister

© Kim Hong-JiStarbucks to hire thousands of refugees to serve Europeans coffee

She told the Financial Times that Germany faces challenges in integrating its enormous migrant population.

According to Ozoguz, only a quarter to a third of the newcomers would enter the labor market over the next five years, and “for many others, we will need up to ten.”

Initially the influx of many working-age, highly-motivated immigrants spurred optimism that they would mitigate Germany’s acute skills shortage. The CEO of carmaker Daimler Dieter Zetsche even said the refugees could lay the foundation for the “next German economic miracle.”

However, according to Ozoguz, time showed the migrants’ lack of qualifications and language skills.

“There has been a shift in perceptions,” she said.

Many of the first Syrian refugees to arrive in Germany were doctors and engineers, but they were followed by “many, many more who lacked skills.”

According to a report by the Institute for Employment Research (IAB), only 45 percent of Syrian refugees in Germany have a school-leaving certificate and 23 percent a college degree.

FILE PHOTO Sakis Mitrolidis’Merkel’s fault’: Poland’s ruling party leader blames Germany for EU refugee crisis

Statistics from the Federal Labor Agency showed the employment rate among refugees stands at just 17 percent. The agency said 484,000 of the refugees are searching for work compared with 322,000 last July.

Ozoguz said the authorities’ top priority was not to find employment for the refugees as soon as possible but to ensure they learned German and had access to training to acquire the skills needed for an advanced industrial economy.

“In the past, we put people very quickly into jobs where they didn’t need to speak, and 40 years later people asked them — how come you still can’t speak German?” she said.

“We don’t want to repeat that mistake.”

German Chancellor Angela Merkel who is seeking a fourth term in Bundestag elections this September has been widely criticized for her ‘open-door’ policy to those fleeing war and persecution.

Around 1.3 million migrants have arrived in Germany since the start of 2015.

Article source: https://www.rt.com/business/393398-refugees-stay-jobless-germany/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Uber CEO Travis Kalanick quits under pressure from investors

Uber CEO Travis Kalanick © Shu ZhangEmbattled Uber chief takes leave of absence to ‘work on himself’

According to The New York Times, five of Uber’s major investors demanded on Tuesday the chief executive resigns immediately. Kalanick will, however, remain on the board of directors.

“I love Uber more than anything in the world, and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement.

Last week Kalanick said he was taking an indefinite leave of absence following the death of his mother in a boating accident.

Uber’s board said in a statement that “Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber.”

“By stepping away, he’s taking the time to heal from his personal tragedy while giving the company room to fully embrace this new chapter in Uber’s history. We look forward to continuing to serve with him on the board.”

Kalanick co-founded Uber in 2009, turning it into a dominant global ride-hailing service.

Over the past year, the company has been rocked by scandals and negative publicity. They included revelations of questionable spy programs, claims of sexual harassment and discrimination, as well as criticism of the way Kalanick was running the company.

Uber has also been dealing with an intellectual property lawsuit from Google’s parent company, Alphabet, over alleged theft of trade secrets related to driverless cars.

Kalanick’s departure is just the latest in a number of senior executives to leave the company.

In recent months, Uber has fired more than 20 employees after an investigation into the company’s culture. The firm has reviewed more than 200 HR complaints including harassment and bullying.

Despite all the troubles, Uber’s business is growing with revenue reaching $3.4 billion in the first quarter of this year. The company is currently valued at $69 billion.

Article source: https://www.rt.com/business/393330-uber-kalanick-quits-pressure/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia to deliver test batch of nuclear fuel to US reactor in 2019

© Christian HartmannThe future of nuclear power: Russia makes fuel device for ultra-safe reactor

TVEL, the fuel supply wing of the Russian State Atomic Energy Corporation, Rosatom, has begun production of TVS-KVADRAT (FA-SQUARE), the new fuel type designed for PWR (pressurized water reactor) plants of Western design.

“A contract on test-industrial operations with one of the US [nuclear power plants] operators is already signed, and we’ll deliver test batch of TVS-KVADRAT fuel assemblies in 2019,” TVEL’s Senior VP for Commerce and International Business, Oleg Grigoriev, told reporters at a news conference during the Atomexpo-2017 forum on Tuesday.

TVEL has already received all the necessary documents from the US plant operator enabling the company to adopt Russian fuel for the US reactor.

“We’re determined to sign another contract on test-industrial operations this year with another major US nuclear power plant operator. In all, there’re five companies in the consortium which supports the TVS-KVADRAT program in the US,” Grigoriev added.

Apart from the contract with a US nuclear power plant operator, TVEL signed an agreement last year on commercial delivery of TVS-KVADRAT fuel to Swedish Vattenfall Nuclear Fuel AB which operates the Ringhals nuclear power plant. The commercial deliveries for Sweden are scheduled to start in 2021, according to Grigoriev.

The TVS-KVADRATs are currently produced in volumes needed to meet the demand of the two companies, but TVEL might expand its production if needed.

READ MORE: Rosatom plans to sell 49% stake in $22bn Turkish nuclear power plant

“There’re possibilities for scaling the production up. It will depend on the market demand,” Grigoriev told reporters on Monday.

The TVS-KVADRAT fuel type is being produced at JSC Novosibirsk Chemical Concentrates Plant. The fuel assemblies derive its name from it being square in section, to be compatible with western pressurized water reactors.

Article source: https://www.rt.com/business/393269-russia-us-nuclear-fuel/?utm_source=rss&utm_medium=rss&utm_campaign=RSS